Authorized Distribution Agreement Template for Saudi Arabia

The Authorized Distribution Agreement is a crucial document for companies seeking to establish or formalize distribution arrangements in Saudi Arabia. It is particularly important given Saudi Arabia's position as the largest market in the Gulf region and its specific legal requirements, including compliance with Sharia law and commercial agency regulations. This agreement is essential when a manufacturer or supplier wishes to appoint a distributor to sell and distribute their products in Saudi Arabia, whether on an exclusive or non-exclusive basis. The document must address various local legal requirements, including commercial registration obligations, agency laws, and Islamic commercial principles. It typically includes detailed provisions on territory rights, performance targets, marketing requirements, and compliance with local regulations, making it a fundamental tool for businesses expanding their distribution networks in the Saudi market.

1. Parties: Identification of the supplier and distributor, including full legal names, addresses, and registration details

2. Background: Context of the agreement, brief description of each party's business, and their intentions for the distribution relationship

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Appointment and Territory: Formal appointment of distributor, definition of territory, and nature of appointment (exclusive/non-exclusive)

5. Products: Description of products covered by the agreement and process for adding/removing products

6. Term and Renewal: Duration of the agreement and conditions for renewal

7. Distributor's Rights and Obligations: Comprehensive list of distributor's rights and responsibilities

8. Supplier's Rights and Obligations: Comprehensive list of supplier's rights and responsibilities

9. Ordering and Delivery: Procedures for ordering products, delivery terms, and logistics arrangements

10. Prices and Payment: Pricing structure, payment terms, and currency provisions

11. Performance Targets: Minimum purchase requirements and performance metrics

12. Marketing and Promotion: Requirements for marketing activities and use of supplier's trademarks

13. Intellectual Property: Protection and usage rights of trademarks, patents, and other IP

14. Confidentiality: Protection of confidential information and trade secrets

15. Compliance: Compliance with laws, including Saudi regulations and Sharia principles

16. Termination: Grounds for termination and termination procedures

17. Post-Termination: Rights and obligations of parties after termination

18. Governing Law and Dispute Resolution: Choice of Saudi law and dispute resolution mechanisms

19. General Provisions: Standard boilerplate clauses including force majeure, notices, and amendments